Nexus of infrastructure investment, economic growth and domestic credit level: evidence from China based on nonlinear ARDL approach

Jin Zichu and Abul Masih

MPRA Paper from University Library of Munich, Germany

Abstract: Infrastructure has experienced a rapid development in China over the past decade. The economic contribution of infrastructure investment has been widely examined in the literature using various data and models. However, the results are inconclusive. This paper using Nonlinear ARDL tests the effect of infrastructure investment on both GDP and domestic private credit level. The paper finds that an increase in infrastructure investment will increase GDP but push the domestic credit level higher. The contribution of this paper is that a stable investment in infrastructure is needed, while the efficiency of the management is also important. Government should take care of the debt level and reduce the debt leverage, as more debt will eventually drag the economy down.

Keywords: Infrastructure; GDP; domestic credit; NARDL; China (search for similar items in EconPapers)
JEL-codes: C22 C58 E51 H41 (search for similar items in EconPapers)
Date: 2018-12-20
New Economics Papers: this item is included in nep-mac and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:100595

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